Speech
of UnderSecretary Hans Leo J. Cacdac
8th National Convention on Labor Management Cooperation
8 November 2011, Avenue Plaza Hotel, Naga City
“LMC: Its Role in the Maintenance of Industrial Peace”
Greetings
Introduction
Like any other country, the Philippines had undergone rapid process of
economic and social change. As have been generally accepted, the era of
globalization and technological innovations increases capital mobility and
market volatility. Notably, these scenarios have far-reaching effects not
only in the structure of economies and the movement of the labor market, but
in the functioning of the industrial relations system as well.
Globalization and advancement in technology provided vast opportunities for
economic growth. However, it also prompted enterprises to undergo
structural adjustments and the government to shift in policy reforms from
traditionally protective stance to something more liberal and responsive to
the times. The need for change gave overwhelming pressure both to the
government and its primary constituencies - the workers and employers, to
continuously find means of viably responding to these emerging changes.
The LMC Movement in the Philippines
Historically, labor-management relations in the Philippines are adversarial
and militant in nature particularly prior and during Martial law times.
Violation of human rights, civil liberties including violation of the rights
to self-organization and collective bargaining abound in the country. To
bring in some air of change, tripartism and social dialogue through
establishment of labor management cooperation is ushered through the
enactment of Labor Code in 1974. The tripartite sectors through subsequent
issuances are encouraged to device a scheme which would promote
systematically and on sustained basis machinery for positive cooperation
between labor and management. This move is further strengthened during the
Cory Aquino Administration when a New Constitution guaranteed the right of
workers to participate in policy and decision-making processes affecting
their rights. In view of the mandate of the 1987 Constitution, the NCMB is
created to promote constructive and positive cooperation at all levels of
industry and enterprise. Parties are encouraged to take steps to adopt
labor-management cooperation programs promotive of employees’ participation
and commitment in deciding ways of improving the quality of worklife thereby
improving work efficiency and cooperation.
LMCs contributed to industrial peace in the country. When NCMB started
operations in 1988, the number of notices of strikes and lockouts (NOS/NOL)
totalled 1,428 with 267 actual strikes. The number is even higher during the
1986 and 1987 periods with 1,613 and 1,715 NOS/NOL, respectively. The number
of strikes and the number of NOS/NOL declined through the years. Actual
strikes went below the hundred level in 1994 and to single-digit in 2007. As
of today, actual strike is pegged at 2 and we hope to contain it at that
level until the end of the year. The NOS/NOL went down to hundred level in
1995 and it continues to decline below 500 mark in 2005. To date, NOS/NOL is
recorded at below 200 mark or at 176 cases only. These developments indicate
the NCMB’s success in managing work stoppages at a minimum levelwhich may
have a direct link with the acceptability of the conciliation mediation
program as a valid and acceptable option for resolving labor-management
disputes and the strengthened promotional campaign on other alternative
dispute mechanisms such as labor management cooperation, grievance
machinery, preventive mediation and voluntary arbitration.
In a study recently conducted by the Workplace Relations Enhancement
Division (WRED) of the NCMB, it was found that companies that have adopted
plant-level mechanisms for communication and joint problem-solving are less
likely to be involved in cases filed with the NCMB. The study which covered
the period 2005-2010 specifically evaluated LMCs in terms of prevention of
disputes and resolution of workplace related issues. The study found that
only about 7% of companies with LMCs were threatened with a strike at any
given year during the six-year period, indicating that a huge 93% of
companies with plant level mechanisms were dispute-free during said
period. A significant 37% (or 95 companies) of the sample of 257 companies
were found to be completely free from involvement in any NCMB case after the
setting up of their LMC.
Cooperation is Innovation
Communication and participation are the two underlying principles
characterizing labor management cooperation. While communication serves as
the heart of employer-employee relations and plays a crucial role in
relationships at work, participation is the significant component of
workers’ empowerment. Maintenance of harmonious industrial relations rests
mainly on the regularity/frequency and quality of communication between
management and workers at the enterprise level. Empowerment, on the other
hand, involves distributing the decision-making power within the
organization to middle managers down to the bottom of the workforce. It adds
dynamism to the employer-employee relationship by giving workers not only a
voice in decision-making on matters that affect their interest and welfare
but also an opportunity to contribute creative, innovative ideas to achieve
enhanced product or service quality and productivity.
Many of the LMCs facilitated by the NCMB in the early 1990s were born out of
the parties’ desire to improve the lines of communication between management
and union after they have experienced lots of turmoil, conflicts, serious
work disruptions and hurting strikes and protracted collective bargaining
negotiations (examples are LMCs of Azucarera de Don Pedro (CADPI), Avon,
Manila Hilton, Bacnotan Consolidated Industries (BCI), Singer, Tag Fibers,
Norgate Apparel Manufacturing, Chemfields Inc., Philippine Sinter
Corporation (PSI), Asian Transmission Corporation (ATC), Davao Light and
Power Company (DLPC), Lapanday developement Corporation (LADECO), Mabuhay
Vinyl Corporation (MVC), Rio Tuba Nickel Mining Corporation (RTNMC),
University of Negros Occidental-Recoletos (UNO-R), etc). Through LMC,
lines of communication were opened which eventually increased the level of
trust and confidence of parties resulting to lesser number of grievances and
cases being submitted to various offices and agencies of the DOLE. The
establishment of LMCs also led to speedier conclusions of their succeeding
CBAs. Some companies put up “Tapatan”, “Kaibigan”, “Talakayan, “Pulungan”,
“Kapatiran”, “Balikatan”, “Ugnayan” which all aimed at setting up an
effective communication channel where all issues can be discussed. Some
companies even used the LMCs as their informal grievance mechanism to
address issues prior to entering the formal dispute resolution machinery.
The role of LMCs continues to evolve depending on the need and purpose of
the company. As mentioned earlier, some operate partly as the enterprise’s
grievance machinery, some as venue for discussions or for organizational
communication, others use it as mechanisms in the pursuit of corporate
social responsibility to promote decent work and environmental
conscientiousness.
Most LMCs facilitated by NCMB focused on improving the 3S’s: sports and
recreation, socials and family welfare and safety and health. Other LMCs
include uniform, canteen/commissary and community welfare, spiriual and
morale development and other committees which address the basic and
immediate needs of the workers. Some more sophisticated companies included
quality circles (ATC, Alsons, Del Monte Philippines), staff development
(LADECO, DLPC, Holcim) and job evaluation committees (CADPI, Holcim).
The new paradigms in LMC
Other innovative practices have recently emerged recognizing that harmonious
relationships at work must be a major consideration in quality improvement
efforts. Greater emphasis is given not only to the multi-skilling and
empowerment of workers but also to the improvement of their employment
conditions as well as their work relations.
Harmony in the relationship between management and workers has assumed
greater significance with the increased realization of the critical role of
workers in quality improvement programs. Continuous education and training
are deemed necessary for the improvement of relationships at work, prompting
external quality and productivity consultants to be increasingly invited to
handle in-house company programs. More and more employees are being given
opportunities to be multi-skilled and to be statistically-minded, in
particular, as well as being quality-oriented.
I am happy to note that many companies being subjected by NCMB
facilitation and enhancement initiaves have transformed into companies with
modern LMCs pursuing quality improvement efforts. Past winners of the Search
for Outstanding LMCs embody the role of higher LMCs contributing to
productivity through greater employee participation.
1. Development
and Training as New Channel of Communication
Modern-day LMCs are moving beyond the ordinary communication systems (e.g.
provision of offices and meeting rooms, monthly/quarerly information
exchanges, broadcast messages, newletters and bulletin boards). Innovative
approach to communication now includes skills enhancement and training as a
channel to deliver new communication skills and new information. LMC
cooperation is best built on a foundation of understanding and trust.
Training is a good place to build that foundation. In-house or off-site
training creates an opportunity for people to participate and learn new
skills. Thorough assessment of training needs and professional design of the
training will yield best results. Training and development used to be an HR
initiative only but with LMC, greater inputs from the employees themselves
could make the project more responsive to the need of the times. LADECO,
DLPC, Holcim, Hedcor Inc, Benguet Electric Cooperative(BENECO), Alsons,
among others, train their employees to enhance their technical competence
and maximize their talents and skills.
2. Continuous
Quality as a Way of Life
LMC is an effective vehicle for the attainment of quality and
productivity improvement in the company. Desired product and service
quality is achieved when there is workplace cooperation because cooperation
builds good relationships which in turn, encourage the employee to perform
better. Also, cooperation generally redound to better quality and higher
productivity especially if it is enhanced by joint efforts of labor and
management in their problem-solving activities for continuous improvement.
Through LMC, employees work better and smarter with each other in
the organization to produce high quality products at least cost in
terms of time, money and effort.
Some companies like Hedcor Inc., BENECO, MVC, Energizer, Del Monte
Philippines focus on quality improvement projects through LMC. For instance,
in Hedcor, it uses LMC to implement its zero-defect project. In BENECO, it
implemented waste management and recycling, energy conservation and
Lakbay-Aral programs. Alsons conducted intensive quality circle leadership
trainings to help management identify the problems in production and come
out with recommendations. ATC included gain-sharing shemes which allow the
employees to benefit from the breakthroughs in productivity and quality. In
MVC, LMC is utilized as a vehicle for the attainment of ISO certifications.
Energizer implemented productivity enhancement programs through small kaizen
(continuous improvement suggestion), total productive
manufacturing-autonomous care (TPM-AC), Ampingan Ta (equipment care), 5S
visual factory management, creation of value streams organizations, pull
system for finished goods, one-piece flow inventory elimination, etc. Lloyd
Laboratories implemented its accident reduction program under their LMC.
3. Reduced
hierarchical barriers between management and workers
An innovative LMC structure contemplates one which devolves communication
and decision-making authority not on a traditional top-to-bottom approach
but in a way in which workers and management are of equal footing. For
example, The Manor at Camp John Hay, a non-unionized company with LMC, has
instituted policies so that workers would feel valued and empowered. They
called their partnership as Dap-ayan ti John Hay. Dap-ayan means a place
where people gather in a circular manner to openly discuss ideas and resolve
issues and concerns in a non-confrontational way. The structure ignores a
working hierarchy so that communications between management and workers
occur conveniently and continuously. It creates down-to-earth behavior by
management and provides a spirit of cooperation both in individual working
behavior and a team spirit in the workplace.
4. Improved
Joint-Problem Solving
LMC is all about creating possibilities, releasing the enterprise
from the constraints of history and their standard operating procedures. In
order for organization to generate creativity, it must focus on new ways of
problem-solving and communication. More innovative organizations have
embraced some formal process of empowering employees and stimulating their
creativy. For example in Energizer, their LMC included committee on Decorum
and Investigation as well as Assessment Team for performance appraisal.
These functions are traditionally the domain of management only but through
LMC, management shows that it is possible to share decision-making in the
processing of administrative cases as well as in the assessment
andevaluation of team performance. In Holcim, the Code of Behavior,
Corporate Job Evaluation and Career Development Projects are to be
undertaken by management with the union through the LMC.
5. Expanded
Corporate Social Responsibility and Voluntary Compliance with Labor Laws and
Labor Standards
Many companies now include LMC programs adopting community
development projects such as adoption of communities in Payatas and Camarin
in the case of FEU-Nicanor Reyes Memorial Foundation. Holcim implements the
Zero-Harm environment as well as compliance with the Continuous Emission
Monitoring System (CEMS). Hedcor, Inc. implements Brgiada Eskuwela to help
several public schools by providing conducive to learning spaces through
beautification and maintenance of classrooms. It also adopted environmental
advocacy program like tree planing and weeding activities.
6. Inclusion of
Livelihood Programs in Welfare Programs
Through LMC, conduct of livelihood seminars on livelihood promotion and
skills training on sewing, meat processing, piggery and poultry and
candle-making are implemented to improve the employee’s way of living and
increase means of earning.
LMCs have indeed served the cause of industrial peace. The parties can
surely affirm that they attain faster resolution of issues and concerns,
even zero-grievance in some companies. Speedy CBA negotiations, zero
strike/lock-outs, better communication system, strengthened teamwork among
the workforce and management, heightened awareness on the role of each
sector and enhanced cooperation and support in company programs and
activities are only some of the benefits derived from LMC. In some
companies, LMC also helped in the minimization of accidents and incidents,
lowering of systems losses, improved health and safety benefits, improved
terms and conditions of work, production of world class products and
services. The good practices in labor and management cooperation illustrate
how LMCs through social partnership among employers, employees and trade
unions can lead enterprise towards enhanced productivity and decent work.
For sure, thesuccessful implementationof these LMCs is difficult and
complex. In the end, all the social partners from the government to the
workers and employers and their organizations have an essential role to play
to ensure the effective application of the LMCs.
Policy Direction
The overarching goal of President Aquino’s 22-Point labor and employment
agenda is to invest in our top resource, our human resource, to make the
Philippines more competitive and to promote industrial peace based on social
justice. Since human capital formation is the foundation of every
productivity improvement initiative, we must sustain our joint efforts to
build up the skills of our workers. Giving premium on human resource
development is the only way to go for any productivity program. Productive
and competitive enterprise can only thrive and achieve its growth potential
in a climate of industrial peace based on social justice.
As what Secretary Baldoz earlier said, we need productivity improvement
warriors and we must start with ourselves. Let us transform ourselves into
champions of innovation. We have to find new ways and means of doing our
work. Let us abandon our comfort zones and be more productive. Let us
practice voluntary compliance with labor laws and regulations to foster
industrial peace and enhance productivity.
In closing, let me state that at no time in the history of labor relations
in our country since 1986 than today when we see the dynamism of tripartism
and social dialogue best harnessed to achieve national development goals. I
challenge all of you to work with us in achieving our labor policy reforms.
Let us help the President in his dream of reshaping the country and
transforming it into a better place for everyone, including the world of
work.
Thank you.
